Types of different crypto wallets

Crypto wallets come in many forms. There are software wallets and there are hardware wallets and even paper wallets.

Before you start buying cryptocurrencies, you should definitely get yourself a crypto wallet.

The idea of a crypto wallet is the same as your normal wallet - that's where you store your cryptocurrencies.

But compared to regular wallets there are very different types of crypto wallets.

Hot Wallet

Hot wallets are always connected to the internet and as such they are slightly less secure. But these are the most popular ones, because hot wallets are easy to use and ideal for daily transactions.

Cold Wallet

Cold wallets store your cryptocurrencies in offline mode and are more secure because of that.

But they are more difficult to use for newbies and are also meant for active holdings (meaning, if you use the cryptos for trading a lot).

Cold wallets are best for HODLers.

Online Wallet

Online wallet is crypto wallet that you can access through your web browser. It can be a wallet at the cryptocurrency exchange you're using or it can be a standalone wallet just to keep your cryptos.

Online wallets offer you a way to manage huge number of different cryptos.

But they are vulnerable to hackers. Or well, they are still secure, but as a hot wallet less secure than cold wallet.

Mobile Wallet

Mobile wallet is a mobile app that you download into your smartphone. These are also always connected to the internet, so you need to make sure your phone is secure.

Desktop Wallet

Desktop wallet is a standalone program you can install on your computer. It's considered more secure than mobile or online wallet.

Hardware wallets

Hardware wallet looks like USB stick with a few buttons on it. While they are the most secure wallets, they can be fairly complicated to use for beginners. And they also come with a price tag of around $100.

Software wallets

Software wallets are convenient. Types of software wallets are online wallets, mobile wallets as well as desktop wallets.

Do crypto wallets really store your crypto?

Actually, no. Although that's what most people think.

Crypto wallets just provide a way to interact with blockchain.

Cryptocurrencies never leave the blockchain, they are just transferred from on address to another.

And your crypto wallet has that address.

Siim Einfeldt photo
Author: Siim Einfeldt
I became interested in cryptocurrencies only a bit more than two years ago. Since then I have been in investing in cryptos using different exchanges. And I also launched Cryptolorium.com when I started trading, just to share my crypto journey and my results.